If this Government is to trip itself up, it seems it will be over something related to farming.

Last month, the proposed scrapping of the Straw Incorporation Measure (SIM) saw the first open disagreement between Charlie McConalogue and his ministers of state and coalition partners Martin Heydon and Pippa Hackett.

The SIM was restored within a week and so was normal service among the ministerial colleagues, who in fairness have been collegiate during their four years together.

The current coalition disagreement over the residential zoned land tax (RZLT) is a far more dangerous moment for this Government.

Fianna Fáil’s Jack Chambers, the finance minister, this week proposed to defer the tax. In doing this, he was echoing the sentiments of Fine Gael’s Simon Harris, the Taoiseach.

Green Party TDs were outraged, with Steven Matthews saying it would be like hiding food during a famine.

Principled stand

Why is this dangerous? Well, no-one was ever going to force a general election over a straw scheme, important and all as it may be for a bunch of tillage farmers (myself included).

However, for the Green Party, the prospect of walking out of Government and into the arms of the voting public on the back of a principled stand in favour of tackling the housing crisis must be a little tempting.

It’s worth recounting exactly how Ossian Smyth, not just a Green Party TD but also the Minister for State in the Department of Public Expenditure, reacted on RTE Radio’s Claire Byrne show to the news that Fianna Fáil and Fine Gael both wanted to defer the tax for another year.

I listened to that interview 19 times and have reproduced it here in it’s entirety. It will take you a couple of minutes to read it, but to be fair, it took me two hours to transcribe it (I’m terrible at transcribing), so please, go on and make the effort.

Radio transcript

“I was amazed to read this. I didn't see that coming at all. Just to be clear, obviously we have a housing crisis. And yet Ireland is a country that has a lot of land. And so, part of the housing for all strategy three years ago was that we passed a law, this was 2021 now, which said that people, if they were found to be hoarding land, land that's both zoned for housing and provided with services that they would have to pay a tax on that - 3% on the value.

“The idea was when we passed that law, we said, anybody who owns this land, you've got two years to get ready. In other words, you got two years to either start building on the land, or to dezone the land, or else if you don't want to do that, sell on the land, if you don't want to build on it, you can pay the tax.

“So that was basically the idea in 2021. 2023 came around, time to pay the tax. And the Government decided to give people an extra year because they weren't ready. So we pushed it forward to three years. So now here we are three years later.

"I opened the newspaper the other day and it says some people, you know, some politicians are thinking that we should do it another year. And I just thought that's the last thing that we should be doing right now.”

Claire Byrne then asked if he had been informed and Mr Smyth refuted that the Government had made a decision on the issue.

“It isn't the Government. The Government has already made a decision about this and has passed a law. So we have a policy. We have a law. it’s quotes, I suppose, attributed to various politicians. It isn’t something that I can agree with and I’ll tell you why. We’ve now gone through the exercise of mapping out the country and finding where are these land banks that are both zoned for residential housing and ready to build on provided with services.

“Well, it turns out there’s 6,500 hectares and it’s enough land for 220,000 homes. It would be absolutely transformative to provide that housing. I don’t think those numbers have been calculated before or have been noticed, but it has actually all been published. Every local authority has been obliged by law to publish a map for all the pieces of land that are both zoned for housing, serviced for housing but have not been built on. If we don’t do that, we’re holding back housing for 220,000 families.

“Most of this land is not farming land. Deferring the entire tax for a year because you’ve found some hard cases that are a minority of people is not the right answer. If there are proposals to identify somebody who is a hard case, who has been treated unfairly, and that they need to have some kind of payoff or exemption, that’s fine. What we’re not going to do is defer the tax for a year. I would never accept that. It’s not going to happen.”

Strong message

That’s a pretty strong message to an electorate that sees housing as a key Government provision, one they are failing to deliver on. Does that mean I think the Green Party is going to walk from Government over this?

I doubt it, to be honest, but as coalition governments approach the end of their terms, the various parties are always going to emphasise points of differentiation. This can lead to tension, as we currently have. Sometimes it can escalate out of control.

It has to be said that Ossian Smyth is mostly correct. There is a need for housing and there is land being hoarded in urban areas. The RZLT is an attempt to free up zoned land by imposing pretty punitive taxes on an annual basis. Remember, it’s 3% of the self-assessed value of the land every year.

So if land were valued only at a small premium over agricultural value, say €25,000 an acre, someone owning 10 acres of zoned land would have to pay €75,000 in RZLT over 10 years. That’s a lot of money.

The problem is that the RZLT has repeated most of the mistakes of the vacant site levy. First of all, it has not differentiated actively farmed land separately.

It doesn’t matter if land is derelict and overgrown or grazed or under crops, the determining criteria are if it’s zoned and serviced.

What defines serviced seems to be another issue. I’ve had farmers recount to me how they have been told their land is serviced even though there is no capacity in the local wastewater facility.

In that scenario, the wastewater pipeline could literally be running through your field and it wouldn’t be possible to get planning for it.

And while Irish Water is full of promises about how it will increase capacity of treatment plants, it has utterly failed to deal with the existing backlog in inadequate sewage in dozens of towns around the country, so forgive me for not holding my breath.

Building logjam

There is another truth. The logjam in building homes is due to many things, but a lack of available land to build on is well down the list. The biggest issue seems to be the cost of building houses.

Despite Irish house prices looking insane to the casual observer, developers say there is no margin for them, particularly when building houses outside the Dublin commuter belt.

The cost of materials has escalated over the last decade in an unprecedented way. Rigorous workplace safety regulations have successfully tackled the appalling level of serious accidents and fatalities on building sites, but have added another layer of cost.

But planning is the biggest issue. One case this week epitomised much of what is wrong. Planning was refused for 146 apartments on the old Tedcastles yard in Dun Laoghaire.

The application was made to an Bord Pleanála under the strategic housing development initiative. Under the terms of this “fast-track” system, it is mandated that decisions are made within 16 weeks.

This took 138 weeks - over eight times longer. That is completely unacceptable. And it seems that almost every planning application is objected to by individuals or politicians for one reason or another.

Where Ossian Smyth was wrong was when he asserted that all farmers have to do to escape the RZLT is to apply to have their land dezoned (cue more transcribing).

“If you never want to build on it, that’s fine, you can ask for it to be dezoned and I’m sure there will be absolutely no problem with that, no problem finding another farmer whose land can be rezoned down the road for just about the same amount, no problem whatsoever. So, we can dezone land absolutely if that’s the case, that’s a solution.”

Evidence to the contrary

Unfortunately, this has not been the experience of farmers. Hundreds have applied to have their land dezoned - the overwhelming majority have been denied.

The responsibility for dezoning rests with local authorities, with good old An Bord Pleanala also involved as the court of appeal for landowners whose request is turned down by their county council.

Perhaps there has been some sea-change since last year, when then-Taoiseach Leo Varadkar informed the Dail in May that over 200 applications for dezoning had been refused by An Bord Pleanala.

He said at the time that the Government was taking advice on whether primary legislation was required to allow that to happen, with an answer expected “in the next couple of weeks”, and a conversation was ongoing with the ministers for housing, finance and public expenditure (Ossian Smyth’s senior minister Paschal Donohoe) on the next steps.

The farm organisations are saying their members who have zoned land have seen no progress since then, no change in policy. And the tax is now due in five months' time.

So if dezoning is the answer, then it needs to be facilitated with a sense of urgency.

Of course, some farmland may be deemed essential to a local authorities’ strategic development plan. In that case, perhaps it can’t or won’t be dezoned. If that’s the case, the land is liable for RZLT.

But where there is no demand for land for housing - as in no-one is looking to buy land to build on it - surely that land should be placed on the strategic reserve.

What, you ask, is the strategic reserve? I’m not 100% sure, but such a classification does exist and zoned land that is placed on the strategic reserve is not liable for the RZLT.

I have been made aware of land in urban centres owned by developers which is currently on strategic reserve, so surely it wouldn’t be a stretch to put farmland that no-one wants to build on there as well.

Dairy dilemma

For dairy farmers in particular, there is another complication around having land zoned. It’s becoming increasingly apparent that stocking rate on the grazing bloc - as opposed to stocking rate across the whole farm - is becoming a hot topic.

With cows in Ireland out grazing for 250 days, there is pressure on the paddocks from the point of nitrates.

Some farms are perfectly laid out in one bloc, but many farms in Ireland consist of fragmented parcels.

So, for a dairy farmer, having part of your grazing bloc zoned could be a death knell. Losing a percentage of your grazing bloc would almost certainly mean a forced reduction in cow numbers - if not now, then soon. All land is not equal, that’s for sure.

Should all come to all and the tax be imposed without a workable solution, I have a suggestion for any unfortunate farmer who finds themselves liable for RZLT. Remember, the land valuation is self-assessed.

Farmland is devalued for sale for agricultural purposes, with a 3% annual tax hanging over it, and as there is no identifiable demand for the land for housing, the farmer would be well within their rights to value the land at an extremely low level. And pay 3% of that.

Whether the Government finds its way through this or not, there is now a sense of inevitability that a general election will be called as soon as Budget 2025 has been presented and passed.

The smart money is on Friday 15 November as the election date, which comes only 10 days after the US presidential vote. It could be a big month for the Harris clan.